11 August 2015

How to make Charities part of your Financial Planning

There's a few reasons why you might not include charitable giving as part of your financial planning: you think the world is perfect already; you think it's someone else's responsibility; you haven't thought about it; or you can't afford it (in which case you are probably not going to be thinking about financial planning anyway!).

Assuming that none of those apply to you then how you can make sure what you give has the maximum effect (for the recipient as well as for you)? I'm mostly talking about registered charities here, although some of this also applies if you are directly supporting someone or something that isn't registered.

1. Give regularly
An occasional coin into a collecting tin in the street is not a bad thing but it's far more effective to give a regular amount by standing order, credit card, or payroll, for example. The charity can plan better and you don't forget! It also makes it easier for you to throw away that junk mail asking for your money if you know you already have a strategy in place.

2. Choose a charity or two that you can take an interest in
You are more motivated to keep in touch if it's something that's close to you. It may be possible to get involved, too.

3. Plan some variety
For example you might choose to support something in the third world plus a UK charity, or a medical charity plus a political issue charity, or a children's charity plus an animal one.

4. Gift Aid your giving
The basic rate tax you have paid on your gift is reclaimed by the charity, adding 25% to your gift. And if you are a higher rate tax payer you will end up paying less tax if you include your Gift-Aided gifts on your tax return. For spouses it may help if the higher taxpayer makes the gifts in their name.

5. Leave to charity in your will
As well as a lump sum benefiting the charity there may be Inheritance Tax advantages for your family / other beneficiaries.

More on the Prime Time Financial website.

5 August 2015

Top Up your State Pension

If you were born before April 1951 (men) or April 1953 (women) and are entitled to the basic State Pension you have the option to increase what you receive by contributing a lump sum. The increase could be between £1 and £25 per week (which is potentially a big proportionate increase).

The "return on your investment" is at a reasonable rate - 5.8% has been cited - so may be well worth considering. And since the State Pension is index-linked and guaranteed for life, and may be inheritable by a spouse, the security level is high.

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